Essar Power Jharkhand assets to be auctioned on March 19
March 13, 2021 1:30 AM
The process memorandum document specified that the liquidator will have discretion to choose from a combination of bids for realising maximum recovery.
The liquidator will auction the Essar Power Jharkhand’s assets in two blocks, as per the process memorandum reviewed by FE.
By Ankur Mishra
Essar Power Jharkhand is set to go under the hammer on March 19, with the liquidator inviting bids for the auction of its assets. The power firm owes Rs 4,165 crore to lenders, of which ICICI Bank has an exposure of Rs 3,625 crore.
This marks one more company landing into the liquidation process without yielding resolution. More than half of the corporate insolvency resolution processes in the current financial year have ended up in liquidation. As per data from the Insolvency and Bankruptcy Board of India, 228 out of 464 cases were closed by liquidation in the current year.
The liquidator will auction the Essar Power Jharkhand’s assets in two blocks, as per the process memorandum reviewed by FE. The reserve price for the first block, comprising the entire plant, machinery and other movable assets, has been kept at Rs 180 crore. The reserve price for the second block has been kept at Rs 23,500 per metric tonne, which includes up to 10,000 metric tonne of fabricated steel structure and scrap.
The process memorandum document specified that the liquidator will have discretion to choose from a combination of bids for realising maximum recovery. It shall be the endeavour of the liquidator to sell all blocks and maximise overall recovery, it said.
A special bench of the National Company Law Tribunal (NCLT), New Delhi, had earlier ordered the liquidation of Essar Power Jharkhand. The court ordered liquidation after the sole bidder, Lighting Solutions, refused to furnish a performance bank guarantee for the power plant. The NCLT had appointed Huzefa Fakhri Sitabkhan as liquidator for the company.
Essar Power Jharkhand was in the process of setting up a 1,200-megawatt pithead coal-fired independent power plant at Latehar district in the state. However, before the project was completed, the company was classified as a non-performing asset by the lenders in September 2016. Lead creditor ICICI Bank took the company to the NCLT in 2017 for defaulting on payments.